Deepak

Presentation Transcript What is a proportionality? : What is a balance? A ratio:- It is the mathematical relationship between devil quantities in the form of a fraction or percentage. A ratio on its own has little or no meaning at all. Significance of employ ratios: : Significance of using ratios: It is compared with other ratios in the very(prenominal) set of pecuniary statements. It is compared with the same ratio in previous financial statements (trend analysis). It is compared with a beat of performance (industry average). WHAT IS RATIO ANALYSIS? : WHAT IS RATIO ANALYSIS? comment:- It refers to an analysis of the relationships of items in financial statements & thereby an investigating into the financial performance of an entity using a series of ratios. motley of ratios:- : Classification of ratios:- Generally ratios are divided into four areas which cater different kinds of information:- leverage Ratios Liquidity Ratios Profitability Ratios 4. different ratios liquid state RATIOS : LIQUIDITY RATIOS MEANING:- It measures the ability of a buckram to meet its short terminal figure obligations & reflects the short term financial solvency of firm.

Classification:- catamenia ratio Acid-test ratio LIQUIDITY RATIOS : LIQUIDITY RATIOS Current ratio:- It is the ratio of total topical assets to total current liabilities. Formula:- current assets current liabilities Current ratio = LIQUIDITY RATIOS : LIQUIDITY RATIOS Acid-test ratio:- It measures the firms ability to convert its current assets quickly into cash in arrangement to meet its current liabilities. Hence also cognise as Quick ratio. Formula: Quick assets current liabilities Acid-test ratio = Leverage ratios : Leverage ratios Meaning:- It is defined as financial ratio which throws light on long term solvency of a firm with regards to the following two aspects:- ability to repay the virtuoso & regular payment of interest Leverage ratios : Leverage ratios Classification:- Debt-equity ratio... If you want to get a full essay, order it on our website: Ordercustompaper.com

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